Business and company law basics

Thailand welcomes foreign investment — within a framework that reserves many business activities for Thais unless you have a licence, a treaty right, or Board of Investment promotion.

The company limited

• The standard vehicle is the private company limited: at least two shareholders (reduced from three in 2023), directors, and registered capital divided into shares.
• Registration is at the Department of Business Development (DBD); companies file audited financial statements every year.
• Majority foreign-owned companies face the Foreign Business Act restrictions below; that is why many trading and service companies you see are majority Thai-owned.

The Foreign Business Act (FBA)

• The FBA restricts “foreign” companies (majority foreign-owned) from long lists of activities — most service businesses included — without a Foreign Business Licence.
• Nominee shareholding to dodge the FBA is illegal and periodically prosecuted. Genuine Thai partners, a licence, BOI promotion, or a treaty (e.g. the US–Thai Treaty of Amity for American investors) are the legitimate paths.
• Manufacturing for export is generally open to foreign majority ownership.

BOI promotion

The Board of Investment promotes targeted industries with incentives that can include 100% foreign ownership, tax holidays, land-ownership rights and streamlined visas/work permits. If your business fits a promoted category, BOI is usually worth serious study before defaulting to a majority-Thai structure.

Working legally: visas and work permits

• Working in Thailand requires a work permit, on top of the right visa (usually Non-Immigrant B). Working without one is a criminal offence for both employee and employer.
• Standard companies must generally meet capital and Thai-employee ratios per foreign work permit; BOI companies get relaxed rules.
• Newer routes — the Long-Term Resident (LTR) visa and SMART visa — bundle work rights for qualifying professionals and investors.

Other rules that bite

• Labour law: statutory severance scales with length of service, and dismissal needs care.
• Tax: corporate income tax with SME rates, VAT registration thresholds, and withholding taxes on many payments.
• Contracts: get bilingual contracts with a governing-language clause — the Thai text usually controls in Thai courts.